20101209 d56935 perth power partnership - 2010 performance audit and asset management review report

8/11/2019 20101209 D56935 Perth Power Partnership - 2010 Performance Audit and Asset Management Review Report

1/133

Performance Audit and Asset Management System Review ReportPerth Power Partnership: Kwinana Co-generation PlantSeptember 2010

Page 1

Final Report

2010 Performance Audit and Asset ManagementSystem Review for Perth Power Partnership

AuditReport

Authorisation Name Position Date

Prepared By Nicole DaviesPrincipal

Consultant(GES Pty Ltd)

September2010

Agreed By(licensee) Debasis Baksi

Perth PowerPartnership

September2010

Geographe Environmental Services Pty ltd

PO Box 572 DUNSBOROUGH WA 6281 Tel: 0438 938 394

September 2010

Audit Report No: KPC0910_3


2/133


Page 2

1. EXECUTIVE SUMMARY ........................................................................................................ 5

1.1 Performance Audit Summary _______________________________________________________ 7

1.2 Asset Management System Review Summary __________________________________________ 9

2. PERFORMANCE AUDIT ...................................................................................................... 10

2.1 Performance Audit Scope _________________________________________________________ 10

2.2 Performance Audit Objective ______________________________________________________ 11

2.3 Performance Audit Methodology ___________________________________________________ 12

2.4 2010 Post Audit Implementation Plan _______________________________________________ 16

3. Asset Management System Effectiveness Review ........... ........... ........... ........... ........... ....... 18 3.1 AMS Review Scope ______________________________________________________________ 18

3.2 Objective of the Asset Management System Review ___________________________________ 22

3.3 Methodology for Asset Management System Review ___________________________________ 22

3.4 2010 Post Audit Implementation Plan _______________________________________________ 29

4. FOLLOW UP AUDIT PROCESS ............................................................................................. 29

LIST OF APPENDICES

1. Perth Power Partnership: Kwinana Cogeneration Plant Performance AuditReview September 2010

2. Perth Power Partnership: Kwinana Cogeneration Plant Asset ManagementSystem Review September 2010


3/133


Page 3

GLOSSARY

BP British Petroleum

Corriolis Supplier Name Flow monitoring device

DAS Data Acquisition System

DCS Distributed Control System

GES Geographe Environmental Services

EMPAC Enterprise Maintenance Planning And Control (proprietary asset management software)

ERA Economic Regulation Authority

HRSG - Heat Recovery Steam Generators

KCP Kwinana Cogeneration Plant

LAN Local Area Net work

IMO Independent Market Operator

IPM International Power Mitsui (a limited liability partnership formed between International

Power Plc of England (70%), and Mitsui & Co Ltd of Japan (30%), Authorised agent for Perth PowerPartnership

IPR/IPL International Power (International Power plc is a leading independent electricity generatingcompany with 30,807 MW gross (18,935 MW net) in operation and 224 MW gross (149 MW net) underconstruction. International Power has power plants in operation or under construction in Australia, theUnited States of America, the United Kingdom, the Czech Republic, France, Germany, Italy, theNetherlands, Portugal, Spain, Turkey, Bahrain, Oman, Qatar, Saudi Arabia, the UAE, Indonesia,Pakistan, Puerto Rico and Thailand. International Power is listed on the London Stock Exchange withticker symbol IPR. Company website: www.ipplc.com)

IT - Information Technology

MARSH (IPRs Insurance Broker and assists IPR in determining insurance and risk control strategy for theiroperations and provides IPR Australia and IPM Kwinana with expert engineering loss control opinion)

PPP Perth Power Partnership (a partnership between IPM (70%) and Transfield Services InfrastructureFund (30%)), License holder of EGL8

RFG Refinery Fuel Gas

SafetyTV - On-line training system supplied by VOCAM

WPN Western Power Networks

SurveyMonkey On-line customer satisfac tion survey
http://www.ipplc.com/http://www.ipplc.com/


4/133


Page 4

This rep or t is p rep a red b y rep resent a t ives of GES Pty Ltd in re la t ion to the a b ove na m ed c lien tsc onforma nc e to the no m ina te d aud it st a nd a rd ( s) . Aud it s a re und er ta ken using a sa m p ling p roc essa nd the rep or t and it s rec om m end a t ions a re re f lec t ive on ly o f a c t iv it ie s and rec ords sigh te d dur ingthis a ud it p roc ess. GES Pty Ltd sha ll no t b e l ia b le fo r loss or da m a g e c a used to o r a c t ions ta ken b y

third p a rt ies a s a c onseq uen c e o f re l ia nc e o n the inform a t ion c onta ined w ithin th is rep or t or it sa c c o m p a n y in g d o c u m e n t a t io n .

Quality Control Record

CLIENT DATE

REQUESTED BY MARK JAMESON: PERTH POWER PARTNERSHIP JANUARY 2010

PREPARED BY NICOLE DAVIES SEPTEMBER 2010

CHECKED BY BRIAN McKENRY SEPTEMBER 2010

REVISION 3 SEPTEMBER 2010


5/133


Page 5

1. EXECUTIVE SUMMARY

The Kwinana Cogeneration Plant (KCP), located within the Kwinana Industrial Strip, Kwinana Beach,

is a gas turbine combined cycle-cogeneration plant capable of producing up to 124MW electricaloutput (capacity declared to the IMO at ISO conditions) and 2,300 tonnes per day of process steamwith the use of duct firing on the heat recovery steam generators (HRSG).

The plant consists of two gas turbines generators, two heat recovery steam generators, and onecontrolled extraction condensing steam turbine generator. Steam is extracted from the steam turbineand delivered for process use as well as to the deaerator as heating system.

Electricity generated is provided to Verve Energy and the BP Kwinana oil refinery under Long TermPower Purchase Agreements. The process steam is provided to the refinery, also under Long Term

Agreement.

Perth Power Partnership (PPP) has engaged Geographe Environmental Services (GES) to undertake

the second Performance Audit and Asset Management System Review as required by the Economic

Regulation Authority (ERA) under generation licence EGL8 under the Electricity Industry Act 2004.

This combined report contains the audit findings for both the Performance Audit and Asset

Management System Review.

Sections 13 & 14 of the Electricity Industry Act 2004 require as a condition of every licence that the

licensee must, not less than once in every period of 24 months (or any longer period that the

Authority allows) calculated from the grant of the licence, provide the Authority with a Performance

Audit and Asset Management System Review conducted by an independent expert acceptable to the

Authority.

The Authority approved the appointment of GES Pty Ltd on the 7 th May 2010 and subsequently

required the development of an audit plan for ERA approval. Notification of the approval of the audit

plan for the 2010 Performance Audit of Licence EGL8 was provided by the ERA.

The period for the audit and review is 1 st July 2008 to 30 th June 2010, and the report is submitted tothe Authority before 30 September 2010 as evidence of compliance with the Authoritys requirements.

The Asset Management System Review and the Performance Audit have been conducted in order to

assess the effectiveness of the Perth Power Partnership Asset Management Systems and level of

compliance with the conditions of its Generation Licence EGL8. Through the execution of the AuditPlan, field work, assessment and testing of the control environment, the information system, control


6/133


Page 6

procedures and compliance attitude, the audit team members have gained reasonable assurance that

Perth Power Partnership: Kwinana Cogeneration Plant has an effective asset management system

and has complied with its Generating Licence during the audit period 1 st July 2008 to 30 th June 2010,

with the exception of Licence Condition 4.1 (Compliance Reporting Manual Ref 85). It is noted that

this non-compliance was in relation to the payment of ERA Licence fees and all root causes have

been identified and resolved in order to ensure future compliance (Refer to Table 5). This audit report

is an accurate representation of the audit teams findings and opinions.

.


7/133


Page 7

1 .1 Per fo rm a nc e Aud i t Sum m a ry

With the exception of Licence Conditions 4.1, which is in relation to the late payment of fees, all

licence requirements reviewed were found to be compliant during the audit.

As required in section 11.4.1 of the Audit Guidelines Electricity, Gas and Water Licences (August

2010) Table 1 summarises the compliance rating for each licence condition using the 7-point rating

scale described in Table 3 (Refer Section 2.3 Methodology).

A comprehensive report of the audit findings is included in Appendix 1.

There were Generation Licence compliance elements that were not included in the scope of this audit

because they did not eventuate in this audit period or have not been established within licence EGL8.

These are defined in Table 1.


8/133


Page 8

Table 1 : Performance Audit Compliance Summary

G e n e r a

t i n g

L i c e n c e

R e

f e r e n c e

( C l =

C l a u s e ,

S c

h =

S c

h e d u

l e )

G e n e r a

t i o n

L i c e n c e

C r i t e r i a

L i k e l i

h o o

d

C o n s e q u e n c e s

I n h e r e n t

R i s k

A d e q u a c y o

f e x

i s t i n g c o n

t r o

l s

C o m p

l i a n c e

R a

t i n g

NR NA 0 1 2 3 4 5

Cl 1 Definitions

Cl 2 Grant of Licence Unlikely Minor Low Strong

Cl 3 Term Unlikely Minor Low Strong

Cl 4 Fees Probable Moderate Low Moderate

Cl 5 Compliance Unlikely Moderate Medium Moderate

Cl 6 Transfer of Licence Unlikely Major High Strong

Cl 7 Cancellation of Licence

Cl 8 Surrender of Licence

Cl 9 Renewal of Licence

Cl 10 Amendment of Licence onapplication of the Licensee

Cl 11 Amendment of Licence by the Authority

Cl 12 Expansion or Reduction ofGenerating Works, DistributionSystems and TransmissionSystems

Unlikely Minor Low Strong

Cl 13 Accounting Records Unlikely Minor Low Strong

Cl 14 Individual PerformanceStandards Cl 15 Performance Audit Unlikely Major High Strong

Cl 16 Asset Management System Unlikely Major High Strong

Cl 17 Reporting Unlikely Major High Strong

Cl 18 Provision of Information Unlikely Major High Strong

Cl 19 Publishing Information Unlikely Minor Low Strong

Cl 20 Notices Unlikely Minor Low Strong

Cl 21 Review of the AuthoritysDecisions


9/133


Page 9

1 .2 Asse t Ma na g em ent System Rev iew Sum m a ry

The asset management system was found to be satisfactory with a few issues requiring attention.

These were Section 4.3 Environmental Analysis, Section 7.5 & 7.6 Asset Management

Information System, Section 9.1 Contingency Planning and Section 10.2 Financial Planning (refer to

Table 9 for specific detail).

As required by section 11.4.2 of the Audit Guidelines (August 2010) Table 2 summarises the auditors

assessment of both the process and policy definition rating and the performance rating for each key

process in the licensees asset management system, using the scales described in Table 5 and Table

6 (refer Section 3.3 Asset Management Review Methodology). The rating was determined by the

auditors judgement based on the execution of the Audit Plan.

The process and policy and asset management system adequacy ratings are summarised below;

Table 2: Asset Management System - Effectiveness Summary

Asset Management System

AssetManagement

Process AndPolicy Definition

Adequacy Rating

AssetManagementPerformance

Rating

1. Asset planning A 1

2. Asset creation/ acquisition A 1

3. Asset disposal A 1

4. Environmental analysis A 1

5. Asset operations A 1

6. Asset maintenance A 1

7. Asset Management Information System A 2

8. Risk management A 1

9. Contingency planning A 2

10. Financial planning A 1

11. Capital expenditure planning A 1

12. Review of AMS A 1


10/133


Page 10

The Audit Guidelines (August 2010 2009) require that auditors who have rated the adequacy of the

process and policy definition process as C or D or the asset management performance as 3 or 4 also

make recommendations to address the issue(s).

2. PERFORMANCE AUDIT

2 .1 Per fo rm a nc e Aud i t Sc op e

This is the second audit of Perth Power Partnerships compliance with obligations relating to

Generation Licence EGL8. As such, the scope of the audit for the period 1 st J uly 2008 to 30 th June

2010 is to:

assess the license holders internal compliance systems (i.e. process, outcome and output

compliance)

assess the license holders compliance with its license (including integrity of reporting)

measure performance over time

The previous Performance Audit covered the period 9 June 2006 to 30 June 2008.

This Performance Audit was conducted over the following period August to September 2010 and anoverview methodology is outlined below;

Initial approval to conduct audit obtained by ERA

Preliminary Audit undertaken to assist with preparation of the Audit Plan

Audit Plan preparation

Submission of the Audit Plan to the ERA

Audit Plan Approval

Performance Audit conducted on site to execute Audit Plan

Preparation of Audit Report

The following people were interviewed during the Performance Audit; Mark Jameson - Operation & Maintenance Supervisor

Ken Ferguson - HSEQ Compliance Advisor

Andrew Usher - Plant Engineer

Lui Dinardo Financial Controller

John Hatton - Access Billing Manager, Western Power


11/133


Page 11

A list of key documents and other information sources examined by the auditor during the

Performance Audit is provided below;

O&M Agreement Power Purchase Agreements Monthly Reports ERA Correspondence Compliance Reports Asset Management Plan Business Plans Lease Agreements Connection Agreement Annual Reports Incident Reports

Further detail is included in Appendix 1 of the report. In preparation the Performance Audit required30 hours of Nicole Davies time.

2 .2 Per fo rm a nc e Aud i t Ob jec t ive

The objective of the performance audit, as defined by the Audit Guidelines, is to assess theeffectiveness of measures taken by the licensee to meet obligations of the performance and quality

standards referred to in the licence.

In addition to compliance requirements, a specific focus is to be taken on the systems and

effectiveness of processes used to ensure compliance with the standards, outputs and outcomes

required by the licence. The audit outcome is to identify areas of non-compliance and areas of

compliance where improvement is required and recommend corrective action as necessary.


12/133


Page 12

2 .3 Pe r fo r m a n c e A u d it M e th o d o l o g y

A risk assessment, assessment of control environment and allocation of audit priority was undertaken

in accordance with the Audit Guidelines Electricity, Gas and Water Licences (August 2010) on

each element relating to Generation licensees of the Electricity Compliance Reporting Manual (1 July

2010) issued by the Authority. However, as the audit period was the 1 st July 2008 to 30 th June 2010,

the new Electricity Compliance and Reporting Manual (1 July 2010) was not applicable to the audit

scope. As such, the Performance Audit was conducted against the 2008 Electricity and Compliance

Reporting Manual (refer ERA website Archived Guidelines). For ease of comparison and future

reference, the 2010 Electricity and Compliance Reporting criteria are noted in brackets within the

table in Appendix 1.

The Performance Audit Methodology as prescribed in the Guidelines was detailed in the Audit Plan.

Table 3 defines the compliance ratings shown in section 1.1.

Table 3: Operational/Performance Compliance Rating Scale

Compliance Status Rating Description of Compliance

Compliant 5 Compliant with no further action required to maintain compliance

Compliant 4 Compliant apart from minor or immaterial recommendations to improve thestrength of internal controls top maintain compliance

Compliant 3 Compliant with major or material recommendations to improve the strength ofinternal controls top maintain compliance

Non-Compliant 2 Does not meet minimum requirements

Significantly Non-Compliant 1 Significant weaknesses and/or serious action required

Not Applicable N/A Determined that the compliance obligation does not apply to the licenseesbusiness operations

Not Rated N/R No relevant activity took place during the audit period, therefore it is not possible toassess compliance

In order to focus the audit effort and identify areas for testing and analysis a preliminary assessment

of the risk and materiality of non-compliance with the Generation Licence was undertaken in

accordance with the requirements of AS/NZS 31000 Risk Management and Appendix 2 of the Audit

Guidelines. This assessment rating was reviewed during the audit process subject to the verification

of control environment.

Follow-Up from Previous Audit Findings

A detailed assessment of the previous audit post implementation action plan was undertaken duringthe audit to assess effectiveness. A summary is provided in Table 4.


13/133


Page 13

Table 4 : 2008 Performance Audit Key Findi ngs, Recommendation, Post Audit Plan & Progress

Ref Licence Condition Issue Recommendation Post-Audit Action Plan Outcome

82 Generation LicenceCondition 16.1

1) The ERA Licence details the organisationsGenerating Works as;

Two gas turbine and one steam turbinegenerators in a combined-cycle, cogenerationarrangement with a nominal 116MW ratedplant capacity whose fuel source is primarilynatural gas or LPG as a secondary fuelsource

It is noted that the LPG gas system has beendisabled and is no longer available to beused as a secondary source. Once formalapprovals have been obtained it will bedecommissioned and removed.

2) In addition, a post mortem outage report isundertaken by the organisation to identifyopportunity for improvements for the nextoutage (Ref: Outage GT1B Minutes23/04/08). It is noted that the findings in thereport are not always acted upon andconsiderations could be given to utilising theEMPAC system to track requirements.

1) Notify the ERA of theintention to remove the LPGFuel System as an alternativefuel source

2) Utilise the work ordersystem to ensure thatrequirements from outagesare completed.

ACTION 1: ERA notified of theintention decommission andremove the LPG Fuel system asan alternative fuel source.

RESPONSIBILITY: J Lee

DATE: 1 st December 2008

ACTION 2: Procedure KCP-02-02Maintenance Planning modifiedto state that the work ordersystem is to be used to ensurethat requirements from outagesare actioned for following

outages.

Action 1 :Letter sent to ERA on23/12/08 from J. Lee

Test: The letter has been sightedand discussions with the Secretariatconfirmed adequacy of actionresponse.

Status: ACTION CLOSED

Action 2: Review of MaintenancePlanning Procedure KCP-02-02.

Test: The Procedure was reviewedand confirmation of item noted.Further, a review of Outage Post-Mortem 4 th September 2009 and

work orders reviewed confirmedthis process has occurred duringthe audit period.

STATUS: ACTION CLOSED





14/133


Page 14



The Risk Survey Reports by Marsh reviewthe consequences of fire risks, natural perils,catastrophic failure, terrorism, etc. It does notconsider the loss of natural gas supplyspecifically however the Business Continuity

Plan (BCP) does consider this event, rankingthe probability of total loss of gas supply asLow. Consideration could be given toreviewing this document in light of theVeranus Island incident as per discussionswith the Asset Manager.

Review Business ContinuityDocument to reflect updatedstrategy for gas supply.

ACTION: Review BusinessContinuity Document to reflectupdated strategy for gas supply.

RESPONSIBILITY: A Usher

DATE: 31 March 2009

A review of the Business ContinuityPlan to follow BCP Procedures laiddown by international Power.

It is noted that there is no simplesolution to obtain alternative supplyof fuel should something happen tothe DBNGP disrupting gas supplies.This will continue to remain on theorganisations agenda until a viablealternative is found.

Test: Discussion with Management,addressed to within controlparameters.

Status: ACTION REVIEW STATUS AT NEXT AUDIT


15/133


Page 15



With respect to the financial reports thefollowing information is noted;

- The partnerships financial reportdoes not comply with AASB124Related Party Disclosure and

AASB7 Financial InstrumentsDisclosure -31/12/07.

- The partnerships financial reportdoes not comply with AASB119Employee Benefits and AASB124Related Party Disclosure 31/12/06

Convey ERA requirement toFinancial Auditors and ensurecompliance with relevantaccounting standards asrequired by licence EGL8.

ACTION: Ensure Financial Auditors are aware of ERArequirements to ensurecompliance with EGL8.

RESPONSIBILITY: FinancialController


KPMG have confirmed that from ameasurement perspective theaccount comply with AASB.Choosing to not meet the disclosurerequirement does not mean PPPdoes not comply with AASB.Compliance with this requirementhas been confirmed.


16/133


Page 16

2.4 2010 Post Au dit Imp lem en tation Plan

As stipulated in section 11.9 of the Audit Guidelines (August 2010), the Audit Team notes that the Performance Audit Post Implementation Plan(Appendix 3) does not form part of the Audit Opinion. It is the responsibility of the licensee to ensure actions are undertaken as determined byPerth Power Partnership: Kwinana Cogeneration Plant.

Table 5: Post Audit Implementation Plan

Ref Aud it Requ irem ent Issue Recommendation Post-Audit Action Plan

85 Generation Licence Condition 4.1 -Electricity Industry Act section 17(1)

The licensee must pay theapplicable fees in accordance withthe Regulations.

A licensee must pay to theAuthority the prescribed licencefee within one month after the dayof grant or renewal of the licenceand within one month after eachanniversary of that day during theterm of the licence.

Non Compliant [2]

Licence fees were paid 4 days after the datethey were required to be paid by thelicence.

The organisation is aware of therequirements for payment of licence feesannually.

As a result of the last audit an EMPAC workorder was established to pay li cence fees.The last date it was set for was the 1/7/10;however, the Licensee has amended thework order to be raised on 9/5/2011. Thisshould ensure future compliance with thisLicence Condition.

The ERA invoice was issued and paid withinthe organisations accounts system aspromptly as allowed. The issue arises assystem requires accounts prior to payment.In order to meet the deadline a paymentwould need to be authorised prior toreceipt of the invoice.

1. Monitoring of the Licence feesin the management meetingcould be considered to ensurethe payment is occurring ontime. Investigation of approvalto pay without the invoicecould be sought.

ACTION:

a) Work order scheduled date broughtforward to ensure more time availablefor payment to be actioned.

b) Purchasing procedure reviewundertaken with regard to makingprovision for regulatory licences to paidon due date regardless of invoice beingreceived.

DATE:

a) Completedb) 31 st March 2011

RESPONSIBILITY: Financial Controller


17/133


Page 17


86 Generation Licence Condition 5.1 The Risk Survey Reports by Marsh review theconsequences of fire risks, natural perils,catastrophic failure, terrorism, etc. It does notconsider the loss of natural gas supplyspecifically however the Business Continuity Plan(BCP) does consider this event, ranking theprobability of total loss of gas supply as Low.Consideration could be given to reviewing thisdocument in light of the Veranus Island incidentas per discussions with the Asset Manager

2. Ensure the post auditimplementation action planfrom the 2008 audit ismonitored for completionand effectiveness.

ACTION:

A review has been undertaken and theprobability ranking of a loss of supplyevent has been increased to Mediumas a result of the Varanus IslandIncident however there is no simplesolution to obtaining alternativesupplies of gas fuel should somethinghappen to upstream productionfacilities or the DBNG pipeline to CS10at Kwinana.

At this time there is no alternativesource of supply available or, perhapsmore importantly, an alternativepipeline route to the plant for thatsupply. This issue will continue toremain on PPP s review agenda untilsuch time as any viable alternativesbecome available and backup suppliescan be arranged.

RESPONSIBILITY: Asset ManagerDATE: Ongoing


18/133


Page 18

3. ASSET MANAGEMENT SYSTEM EFFECTIVENESS REVIEW

3.1 AM S Rev iew Sc op e

The scope of the AMS review includes an assessment of adequacy and effectiveness of Perth Power

Station: Kwinana Cogeneration Plant asset management system, by evaluating during the audit

period 1 st July 2008 to 20 th June 2010 the following;

1. Asset Planning

2. Asset creation/acquisition

3. Asset disposal

4. Environmental analysis5. Asset operations

6. Asset maintenance

7. Asset management information system

8. Risk management

9. Contingency planning

10. Financial planning

11. Capital expenditure planning

12. Review of asset management system

The review has been established as a requirement of the current Generating Licence issued by the

Economic Regulation Authority to Perth Power Partnership: Kwinana Cogeneration Plant.

The asset management review follows the approved audit plan and uses;

a risk based approach to auditing using the risk evaluation model set out in ISO31000:2009

an overall effectiveness rating for an asset management process, based on a combination of

the process and policy adequacy rating and the performance rating

the format and content of the reviewers report; and post- implementation plan as described in

the Guidelines.

The following people were interviewed during the review;

Mark Jameson Operations & Maintenance Supervisor

Ken Ferguson HSEQ Compliance Advisor

Lui Dinardo Financial Controller

Andrew Usher Plant Engineer


19/133


Page 19

The key documents and other information sources are detailed below and further in Appendix 2.

1. Kwinana Cogeneration Project Business Plan 2009 - 132. Kwinana Cogeneration Project Business Plan 2010 - 143. Kwinana Cogeneration Plant Monthly Report Sept 20084. Kwinana Cogeneration Plant Monthly Report June 20095. Kwinana Cogeneration Plant monthly Report February 20106. Verve Contract Supply of Electricity Part 3 Section 8 in Power purchase

Agreement7. BP Contract BP Energy and Services Agreement Supply of Electricity and

Steam Part 3 Section 88. Perth Power Partnership Meeting minutes 10 th March 20109. Perth Power Partnership Meeting minutes 17 th December 200910. Perth Power Partnership Meeting minutes 13 th May 201011. Whole of Plant Risk assessment for Kwinana Cogeneration Plant (spreadsheet)12. Perth Power Partnership Annual Report 200913. Kwinana Cogeneration Plant Annual Report 200914. Kwinana Risk Survey Report Update 03.09 Version 1 (Marsh Report)15. Kwinana Operations and Maintenance Agreement Kwinana Power partnership16. Australian Regional Review Business Plan 2010 - 2014 Asset Overview Perth

Power Partnership17. Kwinana Maintenance Prediction -201018. Customer Satisfaction Survey SurveyMonkey December 2009 July 2010

responses19. External complaint Form KCP-07-0420. Identifying Customer Requirements and Measuring Satisfaction Procedure - KCP-

06-0621. Fuel/Gas Management KCP-03-0222. EMPAC asset management & maintenance software23. Toolbox meeting minutes24. 2010 audit schedule25. Preparation of annual business plan KCP-05-0226. Review by Price Waterhouse Coopers: IPM Operations & Maintenance Kwinana

Pty Ltd Kwinana DSCR Review27. Syndicated Project Facility Agreement 199528. Minutes of Management Meeting 25 May 2009

29. Minutes of Management Meeting 10 February 201030. 6 th May 2010 Kwinana bearing No2 failure report update 8 th June 201031. Purchase of Goods & Services Procedure KCP- 06-0232. Plant or Operational Change Approval Procedure KCP-04-0233. Quality Management Procedure KCP-04-0134. Project Checklist Form KCP-04-0935. Table of IPM Kwinana License Renewals / Reports Due / and Fees36. Record of change to Legislative requirements matrix KCP-01-0137. Minutes of Quarterly Compliance Meeting 3/4/09, 8/6/09,38. Plant or Operational Change Approval Procedure KCP-04-0239. Modification Request Form KCP040140. Disposal of Redundant Assets Procedure KCP-05-25

41. Waste Disposal Procedure KCP 01-0842. Spare Parts Policy Procedure KCP-06-0743. Design process Procedure KCP-04-04


20/133


Page 20

44. IPM Kwinana Cogeneration Plant Business Continuity Plan KCP-08-1445. Table of IPM Kwinana License Renewals / Reports Due / and Fees46. Record of change to Legislative requirements matrix KCP-01-0147. Document register policies and procedures48. Plant Operating Policy KCP 03 & Procedure KCP-03-0449. Plant Operating Logs and Records Procedure KCP-03-2350. Training Procedure KCP-07-1051. Black & Vetch (OEM) Operations & Maintenance Manuals52. GE Operating Manuals53. GE Technician Training manuals54. Training records55. Fuel/Gas Management KCP-03-0256. Weekly Toolbox Meeting minutes57. Training matrix and reports58. Work orders scheduled (PM & unplanned) W/E 19/07/10

59. Overdue PM work orders YTD 12/07/1060. Non-conformance and Corrective and Preventative Action Procedure KCP-07-0761. Abnormal Occurrence Report KCP-03-40 62. Foxboro DCS63. IT Infrastructure Regular Maintenance Procedure KCP-05-2064. LAN Administration Procedure KCP-05-1565. Server Backup Management KCP-05-2166. Training Procedure KCP-07-1067. Logic modifications KCP-02-0668. Corriolis RGF Calibration procedure KCP-02-1069. Process Steam Flow Transmitter Calibration procedure KCP-02-1170. DCS Backing Up Workstation to Tape Procedures KCP-02-20/21/22

71. Site Security Procedure KCP-05-1372. 2010 Internal Audit Schedule73. SAI Triennial Audit Report 25/06/0974. Register of Environmental aspects and Impacts 200975. Internal Management System Audits and Reviews procedure KCP-04-0576. Preparation of Annual Business Plan KCP-05-0277. KCP Business Continuity Plan 2010 Draft78. Testing of Stand-by and Emergency Plan KCP-03-1279. Emergency Operation Loss of Station AC Electrical Supplies and Backup Diesel

Generator Operations KCP-03-1380. Emergency Operation Loss of Water Supply KCP-03-1581. Emergency operation Systems Islanding KCP-03-1682. Emergency Operation Loss of Natural Gas Supply KCP-03-1783. Emergency Operations Protection Operations KCP-03-1884. Emergency Response Plan KCP-08-0285. KIMA Manual KIMA 03986. Review by Price Waterhouse Coopers: IPM Operations & Maintenance Kwinana

Pty Ltd Kwinana DSCR Review87. Syndicated Project Facility Agreement 199588. Kwinana 5 Year Maintenance Prediction -201089. Kwinana Cogeneration Plant 5 Year Capital Spares Purchases 201090. Delegation of Authority for Assets and Business CEOS FPM/FP0191. GV Instructions 2010 Master.docx (2010 2021)92. Kwinana GV 2010 Base Case (2010 2021)93. SAI Triennial Audit Report 25/06/09


21/133


Page 21

The review was conducted in conjunction with the Performance Audit during August 2010 and

included one day preliminary site audit, desktop review, one day audit to execute audit plan and

interview sessions and report writing. In total the audit required 72 hours of Premmck Management

Services (Neema Premji and Brian McKenry) time. This was the first time Premmck Management

Services have carried out a compliance audit on this site.


22/133


Page 22

3 .2 Ob jec t ive o f the Asse t Ma na g em ent System Rev iew

The objective of the review is to examine the effectiveness of the processes used by Perth Power

Partnership: Kwinana Cogeneration Plant to deliver asset management, the information systems

supporting asset management activities and the data and knowledge used to make decisions about

asset management. These elements were examined from a life cycle perspective i.e. planning,

construction, operation, maintenance, renewal, replacement and disposal using the guidelines

developed by the Economic Regulation Authority.

3 .3 Me thod o log y fo r Asse t Ma na g em ent System Rev iew

The audit methodology detailed in the Audit Guidelines Electricity, Gas and Water Licences (August

2010) was used in the execution of the Asset Management System Review and is detailed in the

Audit Plan.

Asset Management System Effecti veness Rating

The Audit Guidelines (section 11.4.2) states that the asset management review report must provide a

table that summarises the auditors assessment of both the process and policy definition rating and

the performance rating for each key process in the licensees asset management system using the

scales described in Table 5 and Table 6. It is left to the judgement of the auditor to determine the

most appropriate rating for each asset management process.


23/133


Page 23

Table 6: Asset management process and policy defini tion adequacy ratings

Rating Description Criteria

A Adequately defined Processes and policies are documented.

Processes and policies adequately document the required performance of the assets.

Processes and policies are subject to regular reviews, and updated where necessary

The asset management information system(s) are adequate in relation to the assets that arebeing managed.

B Requires someimprovement

Process and policy documentation requires improvement.

Processes and policies do not adequately document the required performance of the assets.

Reviews of processes and policies are not conducted regularly enough.

The asset management information system(s) require minor improvements (taking intoconsideration the assets that are being managed).

C Requires significantimprovement

Process and policy documentation is incomplete or requires significant improvement.

Processes and policies do not document the required performance of the assets.

Processes and policies are significantly out of date.

The asset management information system(s) require significant improvements (taking intoconsideration the assets that are being managed).

D Inadequate Processes and policies are not documented.

The asset management information system(s) is not fit for purpose (taking into considerationthe assets that are being managed).


24/133


Page 24

Table 7: Asset management performance ratings

Rating Description Criteria

1 Performingeffectively

The performance of the process meets or exceeds the required levels of performance. Process effectiveness is regularly assessed and corrective action taken where necessary.

2 Opportunity forimprovement

The performance of the process requires some improvement to meet the required level. Process effectiveness reviews are not performed regularly enough. Process improvement opportunities are not actioned.

3 Corrective actionrequired

The performance of the process requires significant improvement to meet the required level. Process effectiveness reviews are performed irregularly, or not at all. Process improvement opportunities are not actioned.

4 Serious actionrequired

Process is not performed, or the performance is so poor that the process is considered to beineffective.

Deviation f rom the Audit Plan

There were several changes made to the risk assessment ratings conducted for the Audit Plan for thePerformance Audit and the Asset Management System Review. The revisions only involve the

adequacy of existing controls. All deviations from the Audit Plan are detailed within Appendix 1 and 2

respectively.


25/133


Page 25

Table 8: Previous Asset Management Review Key Findings, Recommendation, Post Audit Plan & Progr ess

Ref Audit Requirement Issue Recommendation Post-Audit Action Plan Outcome

8.4 The probability and

consequence of asset

failure are regularly

assessed

The probability andconsequences of asset failuresare assessed based onknowledge of the plant,manufacturers data, goodindustry practice and importanceof the asset under consideration.Maintenance plans, policies andprocedures are implemented inEMPAC system to mitigateagainst the consequences offailures. The plant has beencertified compliant withOccupational Health and SafetyManagement Systems AS 4801,Environmental ManagementSystems ISO 14001 and Quality

Management Systems ISO 9001.While the probability andconsequences of asset failureshas been assessed in the past,there does not appear to beregular assessment reviews.

The probability andconsequences of asset failureshould be regularly reviewed toconfirm appropriateness andeffectiveness of maintenancesystems.

ACTION: Developprocedure/process for review ofrisk assessment for assetfailures that is aligned with theplant modification process.

RESPONSIBILITY: Plant Engineer

DATE: 30 th Nov 2008

KCP Procedures KCP-04-01 and

KCP-04-02 amended to show that

the Risk Survey Report is

conducted biennially and that

any Plant Modifications are

reviewed against this report at

that time as well as being

evaluated on their own as each

Mod Request is considered for

approval as per KCP-04-02.


26/133


Page 26

Table 9: Recommendations and Post Audit Action Plans


4.3 Environmental Analysis -Compliance with statutoryand regulatory requirements

Review Priority 2

Effectiveness Rating B3

There has been some disagreement over the

inclusion of the waste water discharge in theLicensees Environmental Licence or BPsEnvironmental Licence.

Currently, the intention of the DEC is toinclude it in PPPs Licence. IPL may challengethis decision. The Environmental Licence forthe site is essentially its licence to operatewithin the environmental parametersdefined, if the disagreement is not readilyresolved the cessation of discharge couldhave an impact on the operational ability ofthe plant.

Recommendation 1: Resolution of

the issue is required to ensure thefuture discharge of waste water inaccordance with licencerequirements.

ACTION:PPP are in discussion with DEC andBP refinery to sort out this ongoingissue under the stipulations of thelong term agreements and takemeasures to comply with theregulatory requirements set down byDEC.

PPP is confident that the issue will beresolved and there would be nodisruption to the operation of theplant.

RESPONSIBILITY: Asset Manager

DATE: Ongoing

7.5 Asset Management

Information System Databackup procedures appearadequate

Review Priority - 4

Effectiveness Rating A2

The DCS backup tapes could not be located in

the library as per procedure. Also all doorsbetween DCS server and library were open,including fire doors

Recommendation 2: The storage of

DCS back-up tapes requires review;although the library is remote to theDCS servers a review of fire safetyprocesses (i.e. fire doors left open) maybe appropriate .

ACTION: Procedure to be amended to

indicate onsite storage as the Fire Proof Safelocated in the Office Amenities room and alsooff site storage through the current serviceprovider.



27/133


Page 27



7.6 Asset ManagementInformation System Keycomputations related tolicensee performancereporting are materiallyaccurate

Review Priority - 4


At the time of the audit concerns were raisedabout where Western Power is monitoringambient temperatures utilised to calculate KCPsmaximum capability

Recommendation 3: The issue withthe ambient temperature monitoringshould be resolved with Western Powerto ensure KCP capability is notadversely affected.

ACTION: Select and agree on a suitabletemperature reference site with SystemManagement/IMO for the purpose ofcalculating KCPs maximum capability.



9.1 Contingency Planning Contingency plans aredocumented, understood andtested to confirm theiroperating ability and to coverhigher risks

Review Priority 4


Currently KCP is in the process of reviewing itsdraft Business Continuity Plan. It requires befinalising and testing as prescribed within theplan.

Recommendation 4: KCP BusinessContinuity Plan 2010 Draft to befinalised and implemented accordingly.

ACTION:

a) BCP to move from draft to approved andmigrated into Lotus Notes proceduresdatabase.

b) Testing of BCP is to be conducted byIPR/Marsh and was scheduled for 2010.

RESPONSIBILITY: Asset Manager

DATE:

a) 31st October 2010

b) 31st December 2010


28/133


Page 28


10.2 Financial Planning Thefinancial plan identifies thesource of funds for capitalexpenditure and recurrentcosts

Review Priority 5


The Syndicated Project Facility Agreementprovided for and continues to provide for a secureline of credit, as a viable source of funds until July2011. The use of this source of credit facility wasevident in the purchase of a new rotor andrefurbishment of the failure rotor of Bearing No. 2.

Recommendation 5: Perth PowerPartnership must investigate financialcredit line instrumentalities andimplement accordingly such that it canbe used as an alternate source of fundsupon the expiration of the currentagreement.

ACTION: a) Review options for credit facilityand make recommendation for approval priorto existing arrangement expiration.

RESPONSIBILITY: Financial Controller

DATE: 31 st May 2011


29/133


Page 29

3.4 2010 Po st Au d i t Im p lem en tat ion Plan

As stipulated in section 11.9 of the Audit Guidelines (August 2010), the Audit Team notes that the AssetManagement Review Post Implementation Plan does not form part of the Audit Opinion. It is theresponsibility of the licensee to ensure actions are undertaken as determined by Perth Power Partnership:Kwinana Cogeneration Plant.

4. FOLLOW UP AUDIT PROCESS

This is the second Performance Audit and Asset Management Review conducted since the issue of

the licence. Review of actions taken in response to recommendations will form part of subsequentaudit plans.

The license proposes that Perth Power Partnership reports progress on the Post AuditImplementation Plan to the ERA in the annual Compliance Reports.


30/133


Page 30

APPENDIX 1

PERTH POWER PARTNERSHIP: KWINANA COGENERATIONPLANT

PERFORMANCE AUDIT SEPTEMBER 2010


31/133


Page 31

ComplianceReportingManual Ref

Licence Condition Requirement Compliance Rating Verification/ Tests Effectiveness

GENERATION LICENCE CONDITION 1 - DEFINITIONS

- Determined to be not applicable to the auditscope.

Not Applicable

[NA]

NOT APPLICABLE

GENERATION LICENCE CONDITION 2 - GRANT OF LICENCE

- Generation Licence condition 2.1- ElectricityIndustry Act 2004

The licensee is granted a licence for thelicence area to construct and operategenerating works or operate existinggenerating works in accordance with theterms and conditions of this licence.

Compliant

[5]

Perth Power Partnership PtyLtd Generation Licence EGL8 Schedule 1

Notice Amendment toElectricity Generation Licence8 (29 January 2009)

Discussions with SiteManagement

Discussions with SystemManagement

Application for GenerationLicence (22/12/2005)

The licensee has operated the generatingworks in accordance with the licenceEGL8.

The installed capacity of the Unit, asdefined by EGL8, is 116 MW. It is notedthat operationally, under certainconditions, the plant has a capability ofachieving a greater output of up to133MW. This is in response to SystemManagements requirements.

Risk Assessment Audit Priority Corrective Action/Opportunity for Improvement

Likelihood

Consequence

Inherent Risk

Unlikely

Minor

Low

5 Nil


32/133


Page 32



Adequacy of Controls Strong

GENERATION LICENCE CONDITION 3 - TERM

- Generation Licence Condition 3.1 - Electricity

Industry Act 2004The licence commences on thecommencement date and continues until theearlier of;

(a) the cancellation of the licence pursuant toclause 7 of this licence;(b) the surrender of the licence pu rsuant toclause 8 of this licence; or(c) the expiry date.

Not Rated

[NR]

Compliance Reports duringaudit period 1 st July 2008 30 th June 2010

Interview with Operation &Maintenance Supervisor

No issues with regards to surrender orcancellation of the licence were raisedduring the audit period. As suchassessment of compliance with clausecannot be undertaken.


Likelihood

Consequence

Inherent Risk

Adequacy of Controls

Unlikely

Moderate

Medium

Strong

4 Nil

GENERATION LICENCE CONDITION 4 - FEES

85

[TYPE NR]

Generation Licence Condition 4.1 - ElectricityIndustry Act section 17 (1)

The licensee must pay the applicable fees inaccordance with the Regulations.

A licensee must pay to the Authority the

Non Compliant

[2]

Payment of fees before the9 th July each year

Discussion with AssetEngineer

Review of payment/pending

Licence fees were paid as follows;

- ERA Invoice ERA182 (date of issue 24June 2010) Approved for payment.(Payment ref #566) Paid 7 th July 2010

Received by the ERA on the 13 th July 2010


33/133


Page 33



prescribed licence fee within one month afterthe day of grant or renewal of the licence andwithin one month after each anniversary ofthat day during the term of the licence.

invoice process

Discussions with TheSecretariat

EMPAC Work Order (File

Number 36)

- ERA Invoice ERA123 (date of issue 16June 2009). Payment ref K013324 (#8094& #530525) Paid 9 th July 2009

Received by the ERA on the 13 th July 2009

The organisation is aware of therequirements for payment of licence feesannually.

As a result of the last aud it an EMPACwork order was established to pay licencefees. The last date it was set f or was the1/7/10, however, the Licensee hasamended the work order to be raised on9/5/2011. This should ensure futurecompliance with this Licence Condition.

The ERA invoice was issued and paidwithin the organisations accounts systemas promptly as allowed. The is sue arises assystem requires accounts prior topayment. In order to meet the deadline apayment would need to be authorisedprior to receipt of the invoice.


Likelihood

Consequence

Inherent Risk

Unlikely

Minor

Low

Moderate

5 1. Monitoring of the Licence fees in the management meeting could beconsidered to ensure the payment is occurring on time. Investigationof approval to pay without the invoice could be sought.

Note: The Adequacy of Controls measure has been revised from Strong toModerate due to audit finding.


34/133


Page 34




GENERATION LICENCE CONDITION 5 COMPLIANCE

- Subject to any modifications or exemptionsgranted pursuant to the Act, the li censeemust comply with any applicable legislation.

Compliant

[4]

Good corporate citizenship

Regulatory controls

Legal advisors

Discussions with PlantEngineer

Compliance with applicable legislationreferred to the in Generation Licenceforms part of this audit. Exceptions arenoted in the executive summary.


Likelihood

Consequence

Inherent Risk


Unlikely

Moderate

Medium

Moderate

4 Note: Refer to corrective actions detailed in the summary Table 9 AssetManagement Review.

86

[TYPE NR]

A licensee must take reasonable steps to

minimise the extent or duration of anyinterruption, suspension or restriction of thesupply of electricity due to an accident,emergency, potential danger or otherunavoidable cause.

Compliant

[5]

Discussion with Operation &

Maintenance Supervisor Operations & Maintenance

Agreement Section 6.3(i)

Operational Procedures

Incident Management

Emergency Procedures

O&M availability criteria;

Operations & Maintenance Agreement

Section 6.3(i) adequately addressesrequirements to maximise electricitygeneration; high availability targets are setfor IPM/PPP safety and environmentalperformance requirements are specified.

Compliance with the Agreement ismonitored by Management.


35/133


Page 35



financial penalties

Secure site

Effective Health and SafetyManagement Plans

Safety Compliance AuditsRisk Assessment Audit Priority Corrective Action/Opportunity for Improvement

Likelihood

Consequence

Inherent Risk


Unlikely

Moderate

Medium

Strong

4 Nil

87

[TYPE 2]

Generation Licence Condition 5.1- ElectricityIndustry Act section 41 (6)

A licensee must pay the costs of taking aninterest in land or an easement over land .

Compliant

[5]

Site Lease between BPRefinery (Kwinana) Pty Ltdand Kwinana PowerPartnership dated 14 th March1995.

2.1814 ha Drawing 3315-24-05

ESA (Energy ServicesAgreement) between Lessorand Lessee dated 7th March1995

The Kwinana site is leased from BP until2023. This timeframe is aligned with allother relevant contract documentation. Itis noted that the ERA Licence is valid until2036.


Likelihood

Consequence

Unlikely

Minor

5 Nil


36/133


Page 36



Inherent Risk


Low

Strong

Electricity Industry Metering Code

309

[TYPE 2]

(326)

Generation Licence Condition 5.1 - ElectricityIndustry Metering Code clause 3.5(6)

A network operator may only impose acharge for providing, installing, operating ormaintaining a metering installation inaccordance with the applicable service levelagreement between it and the user. WesternPower Corporation (WPC) is the NetworkOperator for Kwinana CogenerationPlant/PPP

Not Applicable

[NA]

Not Applicable as Perth Power Partnership is not the Network Operator.Reference to Electricity Industry Metering Code.

319

[TYPE 2]

(336)


A Code participant who becomes aware of anoutage or malfunction of a meteringinstallation must advise the network operatoras soon as practicable.

Compliant

[5]

SCADA DATA

Management Meeting

Discussion with Plant

Engineers Discussion with Western

Power

Although, The Electricity Metering Code isnot applicable to the scope of the auditthis item is relevant for consideration asthe Licensee still has an obligation to

report a malfunction of a meteringinstallation. There are systems establishedand adequate monitoring programs toidentify a malfunction should it not beidentified by the Network Operator in thefirst instance.


Likelihood Unlikely 4 Nil


37/133


Page 37



Consequence

Inherent Risk


Moderate

Medium

Strong

Note: This was rated as Not Applicable in the Audit Plan as the Licensee is notdirectly response for the metering installations. A request from the Secretariatto consider the requirement was made during the audit process.

331

[TYPE 2]

(348)


A network operator or a user may require theother to negotiate and enter into a writtenservice level agreement in respect of thematters in the metrology procedure dealtwith under clause 3.16(4) of the Code.

Not Applicable

[NA]

WPN is responsible for metering and this further defined within theConnection Agreement.

342

[TYPE 2]

(359)

Generation Licence Condition 5.1 - ElectricityIndustry Metering Code clause 3.27

A person must not install a meteringinstallation on a network unless the person isthe network operator or a registeredmetering installation provider for the networkoperator doing the type of work authorised

by its registration.

Not Applicable

[NA]

Tariff meters installed at the Kwinana Cogeneration Plant are theresponsibility of Western Power .

349

[TYPE NR]

(366)


A network operator and affected Codeparticipants must liaise together to determinethe most appropriate way to resolve adiscrepancy between energy data held in a

Not Applicable

[NA]

Managed via contracts with Verve. WPN and System Management have directcontrol of metering.


38/133


Page 38



metering installation and data held in themetering database.

350

[TYPE NR]

(367)

Generation Licence Condition 5.1 - Electricity

Industry Metering Code clause 4.5(1)A Code participant must not knowinglypermit the registry to be materiallyinaccurate.

Not Applicable

[NA]

Managed via contracts with Verve. WPN and System Management have direct

control of metering.

351

[TYPE 2]

(368)


If a Code participant (other than a networkoperator) becomes aware of a change to o ran inaccuracy in an item of standing data inthe registry, then it must notify the networkoperator and provide details of the change orinaccuracy within the timeframes prescribed.

Not Applicable

[NA]


363

[TYPE NR]

(380)


A user must, when reasonably requested by anetwork operator, use reasonableendeavours to assist the network operator tocomply with the network operatorsobligation under clause 5.4(1).

Not Applicable

[NA]


365

[TYPE 2]


Not Applicable Managed via contracts with Verve. WPN and System Management have directcontrol of metering.


39/133


Page 39



(382)A user must not impose any charge for theprovision of the data under this Code unless itis permitted to do so under anotherenactment.

[NA]

376[TYPE 2]

(393)


A user that collects or receives energy datafrom a metering installation must provide thenetwork operator with the energy data (inaccordance with the communication rules)within the timeframes prescribed.

Not Applicable[NA]


377

[TYPE 2]

(394)

Generation Licence Condition 5.1 -Electricity Industry Metering Code clause5.17(1)

A user must provide standing data andvalidated (and where necessary substitutedor estimated) energy data to the userscustomer, to which that information relates,where the user is required by an enactmentor an agreement to do so for billing purposesor for the purpose of providing meteringservices to the customer.

Not Applicable

[NA]


377

[TYPE 2]

Generation Licence Condition 5.1 -Electricity Industry Metering Code clause5.18

A user that collects or receives information

Not Applicable

[NA]



40/133


Page 40



(395)

regarding a change in the energisation statusof a metering point must provide the networkoperator with the prescribed information,including the stated attributes, within thetimeframes prescribed.

379

[TYPE NR]

(396)


A user must, when requested by the networkoperator acting in accordance with goodelectricity industry practice, use reasonableendeavours to collect information fromcustomers, if any, that assists the networkoperator in meeting its obligations describedin the Code and elsewhere.

Not Applicable

[NA]


380

[TYPE NR]

(397)


A user must, to the extent that it is able,collect and maintain a record of the address,site and customer attributes, prescribed inrelation to the site of each connection point,with which the user is associated.

Not Applicable

[NA]


381

[TYPE 2]

(398)


A user must, after becoming aware of anychange in a sites prescribed attributes, notifythe network operator of the change within

Not Applicable

[NA]



41/133


Page 41



the timeframes prescribed.

382

[TYPE 2]

(399)


A user that becomes aware that there is asensitive load at a customers site mustimmediately notify the network operatorsNetwork Operations Control Centre of thefact.

Not Applicable

[NA]


384

[TYPE NR]

(401)


A user must use reasonable endeavours toensure that it does notify the networkoperator of a change in an attribute thatresults from the provision of standing data bythe network operator to the user.

Not Applicable

[NA]


390

[TYPE 2]

(407)


A Code participant must not request a test oraudit unless the Code participant is a user andthe test or audit relates to a time or times atwhich the user was the current user or theCode participant is the IMO.

Not Applicable

[NA]


391

[TYPE 2]


Not Applicable

[NA]



42/133


Page 42



(408)

A Code participant must not make a test oraudit request that is inconsistent with anyaccess arrangement or agreement.

426

[TYPE 2]

(409)


Industry Metering Code clause 5.27Upon request, a current user must providethe network operator with customer attributeinformation that it reasonably believes aremissing or incorrect within the timeframesprescribed.

Not Applicable

[NA]


433

[TYPE 2]

(416)


A user must, in relation to a network onwhich it has an access contract, comply withthe rules, procedures, agreements andcriteria prescribed.

Not Applicable

[NA]


435

[TYPE NR]

(418)


Code participants must use reasonableendeavours to ensure that they can send andreceive a notice by post, facsimile andelectronic communication and must notifythe network operator of a telephone numberfor voice communication in connection withthe Code.

Not Applicable

[NA]



43/133


Page 43



437

[TYPE 2]

(420)


A Code participant must notify its contactdetails to a network operator with whom it

has entered into an access contract within 3business days after the network operatorsrequest.

Not Applicable

[NA]


438

[TYPE 2]

(421)


A Code participant must notify any affectednetwork operator of any change to thecontact details it notified to the networkoperator at least 3 business days before thechange takes effect.

Not Applicable

[NA]


439

[TYPE 2]

(422)


A Code participant must not disclose, orpermit the disclosure of, confidentialinformation provided to it under or inconnection with the Code and may only useor reproduce confidential information for thepurpose for which it was disclosed or anotherpurpose contemplated by the Code.

Not Applicable

[NA]


440

[TYPE 2]


Not Applicable

[NA]



44/133


Page 44



(423)

A Code participant must disclose or permitthe disclosure of confidential information thatis required to be disclosed by the Code.

441

[TYPE 2]

(424)


Industry Metering Code clause 8.1(1)Representatives of disputing parties mustmeet within 5 business days after a noticegiven by a disputing party to the otherdisputing parties and attempt to resolve thedispute under or in connection with theElectricity Industry Metering Code bynegotiations in good faith.

Not Applicable

[NA]


425

[TYPE NR]

(442)


If a dispute is not resolved within 10 businessdays after the dispute is referred torepresentative negotiations, the disputingparties must refer the dispute to a seniormanagement officer of each disputing partywho must meet and attempt to resolve thedispute by negotiations in good faith.

Not Applicable

[NA]


426

[TYPE NR]

(443)


If the dispute is not resolved within 10business days after the dispute is referred tosenior management negotiations, the

Not Applicable

[NA]



45/133


Page 45



disputing parties must refer the dispute tothe senior executive officer of each disputingparty who must meet and attempt to resolvethe dispute by negotiations in good faith.

427[TYPE 2]

(444)


If the dispute is resolved by representativenegotiations, senior managementnegotiations or CEO negotiations, thedisputing parties must prepare a written andsigned record of the resolution and adhere tothe resolution.

Not Applicable[NA]


428

[TYPE NR]

(445)


The disputing parties must at all timesconduct themselves in a manner which isdirected towards achieving the objective ofdispute resolution with as little formality andtechnicality and with as much expedition asthe requirements of Part 8 of the Code and aproper hearing and determination of thedispute, permit

Not Applicable

[NA]


- Generation Licence Condition 5.1 - Review ofGovernment Gazette Amendments

GG54 Electricity Industry Act 2004.p1088.03 April 2009

Compliant

[5]

Discussion with PlantManager

Corporate requirements inrelation to compliance and

Perth Power Partnership utilise legalcounsel and keep abreast of legal changesthrough this process as well as throughcommunications received from the


46/133


Page 46



GG101 Electricity Industry Act 2004.p2135.16-Jun-2006

reputation Authority.


Likelihood

Consequence

Inherent Risk


Unlikely

Moderate

Medium

Strong

4 Nil

- Generation Licence condition 5.2

Subject to the provisions of any applicablelegislation, the Authority may direct theLicensee in writing to do any measurenecessary to:

(a) correct the breach of any appli cablelegislation; or

(b) prevent the breach of any applicablelegislation occurring again,

and specify a time limit by which such actionmust be taken

Not Rated

[NR]

Discussion with PlantEngineer

During the audit scope the Authority hasnot required the licensee to correct thebreach of any applicable legislation; orprevent the breach of any applicablelegislation occurring again. As suchassessment of compliance with clausecannot be undertaken.


Likelihood

Consequence

Inherent Risk


Unlikely

Moderate

Medium

Strong

4 Nil


47/133


Page 47



GENERATION LICENCE CONDITION 6 - TRANSFER OF LICENCE

Generation Licence condition 6.1 - ElectricityIndustry Act section 18 -Transfer of a licence

This licence may be transferred only inaccordance with the Act.

Not Applicable

[NA]

Discussion with Operation &Maintenance Supervisor

No transfer of licence undertaken duringthe audit period. As such assessment ofcompliance with clause cannot beundertaken.

GENERATION LICENCE CONDITION 7 - CANCELLATION OF LICENCE

Generation Licence condition 7.1 - ElectricityIndustry Act section 35 -Cancellation of alicence

This licence may be cancelled only inaccordance with the Act .

Not Applicable

[NA]

Determined not to be applicable to audit

GENERATION LICENCE CONDITION 8 - SURRENDER OF LICENCE

-Generation Licence condition 8.1 - ElectricityIndustry Act 2004 (Schedule 1 - provision l)

The licensee may surrender the licence at anytime by written notice to the Authority .

Not Applicable

[NA]


- Generation Licence condition 8.2

The surrender of the licence will take effecton the day that the Authority publishes anotice of the surrender in the Gazette.

Not Applicable

[NA]



48/133


49/133


Page 49



Consequence

Inherent Risk


Moderate

Medium

Strong

Generation Licence condition 11.2Before amending the licence under clause11.1, the Authority must:

(a) provide the licensee with written notice ofthe proposed amendments underconsideration by the Authority;

(b) allow 15 business days for the licensee tomake submissions on the proposedamendments; and

(c) take into consideration those submissions.

Compliant[5]

Discussions with Operation &Maintenance Supervisor

Decision on Amendment toCustomer Definition -Electricity Licences(29/01/09)

Adequate review time was provided for inthe amendment of the licence condition.Compliance with Licence Condition 11.2 isnoted.


Likelihood

Consequence

Inherent RiskAdequacy of Controls

Unlikely

Moderate

MediumStrong

4 Nil

Generation Licence condition 11.3

This clause also applies to the substitution ofthe existing licence.

Not Applicable

[NA]



50/133


Page 50




For avoidance of doubt, the licensee will nothave to pay an associated application fee orlicence fee for the purpose of clause 11.1.

Not Applicable

[NA]


GENERATION LICENCE CONDITION 12 - EXPANSION OF GENERATING WORKS


The licensee may expand or reduce thegenerating works if the relevant expansion orreduction is provided for in the assetmanagement system.

Compliant

[5]

O&M Agreement

Business Plan

Asset Management PlanningProcess

Annual Compliance Reportsto the ERA due 31 st August

There has been no expansion or reductionin generation works during the au

20101209 d56935 perth power partnership - 2010 performance audit and asset management review report

Documents